The possibility of a bank failure may have you wondering if you are in business with the right banker. Not all banks are the same -- and regrettably we've seen this truth play out. So, how do you decide who to trust with your money? Which bank will provide the services you need, at the right price, while limiting your exposure to catastrophic failure? Here are five things to consider as you determine your path forward.
1. What is your risk tolerance? Only you know how much risk you are willing to live with. Distilling risk-reward tradeoffs among the various banking partners will help you to make an informed decision that is right for you.
2. Which services are most important to you? Just like you, each bank has a unique risk tolerance. If a line of credit without a personal guaranty is your priority, talk to a smaller bank. If stability worries you, one of the larger institutions will help you sleep at night.
3. How complicated is your business? Businesses with more complex needs, such as international transactions and investment banking, should think carefully about the whole picture. More sophisticated banking activities vary widely in quality and price.
4. Is automation through technology one of your top priorities? It is very simple; the larger banks have more money to invest in technology. But you pay for that technology in the long run. The standard banking platforms used by smaller banks may offer the cost-effective solution you need.
5. What is your view of business relationships? Look, we have all experienced the frustration of dealing with automated customer service and call centers. Realistically, in a large institution, your small organization will be a small fish in a large pond. If a long-term, personal relationship is your priority, regional banks will be a better choice. While somewhat commoditized, banking is still differentiated with service.
If you still aren’t sure where to turn or just want an assessment of your banking decisions, we can help. We offer small businesses and non-profit organizations almost 100 years of combined experience in financial services. With a deep understanding of FDIC guarantees and bank products, we will add expert insights to your overall cash management strategy.
Our Partners speak the language of Wall Street and can help you rethink your banking relationship to safely achieve your goals and negotiate on your behalf. Frequently, our solutions create cost savings and financial returns that pay for our services many times over, all with an expert eye on risk management.